TaxTMI 
TaxTMI 
TaxTMI 
2015 (3) TMI 823
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....vi Mumbai. M/s Chemagis India Pvt. Ltd., Mumbai 1691775 55661 3 F.No.195/130/12-RA US/414-415/RGD/11 dt. 17.11.11 M/s Dy-Mach. Pharma, Mumbai Commissioner of Central Excise, Navi Mumbai 353908 --- 4 F.No.198/31/12-RA US/414-416/RGD/11 dt. 17.11.11 Commissioner of Central Excise, Navi Mumbai M/s Dy-Mach Pharma, Mumbai 353908 1975 2. Brief facts of the cases are that the original authority sanctioned the rebate claims with reference to M/s Chemagis 'India Pvt. Ltd. and M/s Dy-mach Pharma. The department filed appeal before Commissioner (Appeals) on the ground that the rebate claims to the tune of Rs. 55661/- and Rs. 1975/- were wrongly sanctioned. It was contended in the appeals that the value declared in the ARE-1 was more than the FOB value declared in the Shipping Bills. The value declared in the ARE-1 was more, which was not the correct transaction value and the duty amount paid on the said excess value was not admissible as rebate. The transaction value as per Section 4 of Central Excise Act, 1944 is the value at which goods are sold but does not include freight and insurance. The Commercial invoice value is the value at which goods are sold. Theref....
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....lar No.510/06/2000-Cx dated 3.2.2000 says that the duty element shown on AR-4 has to be rebated, if the jurisdictional Range officer certifies it to be correct. The CBEC circular is also clear that there is no question of re-qualifying the amount' rebate by the rebate sanctioning authority by applying some der rate of exchange prevalent subsequent to the date on which the. Duty was paid. Therefore, once the jurisdictional Excise official has authenticated the triplicate copy of the ARE-I, the assessment procedure stands completed. The CBEC circular also says that if the-rebate sanctioning authority has reasons to believe that duty has been paid in excess than what should have been paid, he shall inform, after granting the rebate, the jurisdictional Assistant/Deputy Commissioner. The language of the CBEC circular is unambiguous & leaves no room for interpretation. The said circular was brought to the notice of the Commissioner (Appeals) & the same is simply recorded in the order but no findings are given or why the said circular need not be followed by the field formation! The adjudicating authorities cannot circumvent The issues raised in this manner, which are against the depa....
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....ly with the FOB value of exports. In FOB contracts, there is no freight & insurance to be subtracted then the difference between the ARE-1 assessable value & the FOB value given in the S/B cannot arise on account of freight & insurance! The CBEC circular of 1996 says has already clarified that AR4 assessable value & S/B FOB value need not be the same. Therefore; until & unless the Rebate sanctioning authority is definitely able to establish the reason for the difference, the rebate sanctioning authority cannot bring about a case against the rebate claimant on the wrong premise that the difference between FOB value of exports given in the S/B & the assessable value given in the ARE-1 is the freight & insurance element. More so, when the transaction value can include any charges, in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time therefore the definition is very wide to include several other charges such as storage, sample testing etc. The freight & Insurance are related to the sale & cannot be excluded if no....
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....of M/s,,Girnatex Industries Ltd. Vs CCE Nagpur 2010(261) E.L.T.1026 (Tri-Mumbai)] & Nagpur Transwell power Pt. Ltd. Vs CCE, Nagpur 2009 (243) ELT 459(T) are of no value. 3.1.8 "Free on Board" means that the seller delivers when the goods pass the ship's rail at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that point. The FOB term requires the seller to clear the goods for export. This term can be used only for sea or inland waterway transport. If the parties do riot intend to deliver the goods across the ships rail, the FCA term should be used. The .other definitions of C&F & the CIF are not reproduced for the sake of brevity but the sellers responsibility to deliver the goods under the ships rail remains as it is under these categories of shipments also. Therefore, the undisputable fact, remains that under FOB/C&F/CIF, the responsibility rests on the seller to deliver the goods cleared for export at the named port of shipment. Even in case of Air shipment the term to be used is FCA, which means that the goods are to be delivered to the carrier at the named place for shipment. 3.2 Grounds in Revis....
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....gh the relevant case records and perused the impugned orders-in-original and orders-in-appeal 6. Government observes that the said rebate claims were initially sanctioned in toto by the original authority., Department, filed appeals before Commissioner (Appeals) mainly on the ground that the rebate claims were= sanctioned of duty paid on value which was more than transaction value and the claims should be restricted to duty paid on transaction value. The applicant department had disputed only the excess payment of rebate claims of Rs. 55661/- and Rs. 1975/- only Commissioner (Appeals) while allowing department's appeals has also set aside the entire impugned orders-in-original. Now, the applicant parties as well as department have filed these revision applications on grounds mentioned in para (3) above. 7. Government observes that as per para 3(b) (ii) of Notification No 19/04- CE(NT) dated 6.09.04, the rebate sanctioning authority has to satisfy himself that rebate claim is in order before sanctioning :the same. If the claim is in order he shall sanction the rebate either in whole or in part. The said para 3(b)(II) is reproduced below :- "3(6) Presentation of claim for reba....
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....of applicant vide GOI order No 926- 991/2011-Cx dated 25.07.2011. The operative portion of said order is reproduced as under:- 8.1 As per section 4(1) (a) of Central Excise Act, 1944 where duty of excise is chargeable on any excisable goods with reference to their value, then on each removal of said goods such value shall. (a) In a case where the goods are sold by the assessee; for delivery at time and place of the removal, the assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, be the transaction value (b) In other case, including the cases where the goods are not sold be the value determined In such manner as may be prescribed 8.2 The word Yale has been defined in S#Cti017 2(h) of the Central Excise Act, 1944, which reads as follows: "'Sale' and 'Purchase' with their grammatical variations and cognnate expression, mean any transfer of the possession of goods by one person on another in ordinary course of trade of business for cash or deferred payment of other valuable consideration." 8.3 Place of Removal has been defined under Section 4(3) (C)(i),(ii),(iii) as: (i) A factory or any other place or premise....
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....ged-to deliver the goods to the Shipping Company and in such a case the place of -delivery may be the place of removal is not tenable. The Commissioner (Appeals) order holding that the price contracted for sale at the time and place of removal and reflected in invoice can be accepted in a situation where the contracted price is all inclusive of freight. Insurance, then such CIF price will be transaction value is contrary to provision of Section 4 of Central Excise Act and is not correct since the freight, insurance incurred beyond the place of removal/sale is to be excluded from the value as it does not form part transaction value in terms of Rule 5 of Central Excise Valuation rules, 2000. The GOI order No. 271/05 dated 25.7.05 is the case of CCE Nagpur Vs. M/s Bhagirath Textiles Ltd. reported as 2006 (202) ELT 147 (GOI) has also held as under:- "the exporter is not liable to pay Central Excise duty on the CIF value of the goods but central Excise duty is to be pad on the transaction value of the goods as prescribed under Section 4 of the Central excise Act, 1944". It is clear from the order that in any case duty is not to be paid on the CIF value. 8.6 Hon'ble Supreme Court i....
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....circular 203/37/96-Cx dated 26.4.96 was issued when transaction value concept was not introduced yet the said circular dearly states that AR4 value of excisable goods should be determined under section 4 of Central Excise Act, 1944 which is required to be mentioned on the Cent/ear/se invoices. Even now the ARE value is to be the value of excisable goods determined under section 4 of Central Excise Act,1944 i.e. the transaction value as defined in section 4(3)(d) of Central Excise Act. CBEC has further reiterated in its subsequent circular No.510/06/2000-Cx dated 3.2.2000 that as clarifier/ in circular dated 26.4.96 the AR4 value is to be determined under section 4 of Central Excise Act, 1944 and this value is relevant for the purpose of rule 12 and 13 of Central Excise Rules. The AR4 and rule 12/13 are now replaced by ARE-1 and rule 18/19 of Central Excise Rules, 2002 It has been stipulated in the notification No.19/04- CE(NT) dated 6.9.04 and the CBEC circular No.510/06/2000-0( dated 3.2.2000 that rebate of whole of duty paid on all excisable goods will be granted. Here also the whole duty of excise would mean the duty payable under the provision of Central Excise Act. Any amount....
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....r from the date of export. In the said case, no issue of CIF value / FOB value was examined. 8.4 Similarly in the case of SPL Industries, Government in para 8 of its order had noted that the foreign remittances as per BRCs is equal to the ARE-1 value and therefore the order-in-appeal accepting the ARE-1 value as transaction value was upheld without examining the transaction value with respect to CIF/FOB value. In the said case, Government had not specifically examined the issue of transaction value with respect to CIF value/FOB value. Government has subsequently examined the issue of transaction value with respect to CIF value/FOB value in number of Revision Orders in the case of namely M/s Rohm & Hass (I) Pvt. Ltd., GOI order No. 728-732/11-RA-Cx, M/s Vinati Organics Ltd. GOI order No. 573-604/11-Cx dated 26.5.11, and number of other orders. In all these orders a similar decision is taken. The similar decision taken in applicants case vide GOI Order No. 926-991/2011-Cx date 25.07.2011 has also been reproduced in para 8 above. Applicant is citing order of year 2010 which cannot be made applicable to the present issue due to the reason stated above. Moreover, the issue is specifica....